Why Polypore International's Shares Dropped

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Polypore International (NYS: PPO) fell 10% in early trading after the company updated guidance, but recovered all of the loss with two hours left in the trading day.

So what: Management said that third-quarter earnings would be in the low-to-mid $0.30 range, well below analyst estimates of $0.49. Slow sales in July and August led to the shortfall, although the pace of sales has picked up in September.


Now what: The stock was already near a 52-week low, so there's a lot of bad news priced in even before today's announcement. I think that's why the stock has recovered as the day went on. Slow sales in the EV market aren't surprising anyone, and if you're a buyer of Polypore, you have to have a longer horizon than a quarter or two.

I don't see this as a good development, but I wouldn't panic over a slow quarter at this point. EVs are being adopted slowly, and if you have a long enough horizon, this is still a decent way to play this potentially large market.

Interested in more info on Polypore International? Add it to your watchlist byclicking here.

The article Why Polypore International's Shares Dropped originally appeared on Fool.com.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Motley Fool newsletter services have recommended buying shares of Polypore International. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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